Wood River times. [volume] (Hailey, Idaho) 1882-1915, 1887-06-03
THE BUSINESS WORLD.
Some Suggestive Facts and Figures
Worthy of Study.


Worthy of Study.
Especial Correspondence
NEW YORK, May %.
Financial and political authorities agree
that the depression which begun in 1881, fol-
lowing the short lived ''boom" of 1S19-S0 and
endured so long, is past, and that something
like a "boom" is at hand. But shrewd Oh
servers cannot fail to see that this era of
activity will be totally unlike the last, and
still more unlike that season of feverish
speculation which preceded the great panic
OF 1913. In fact, the conditions are so diff
ferent from those prevailing in '13 and i'll 80
that no precedent can be drawn. There is now
no large volume Of irredeeEable but legal
tender paper, no failure Of the grain crops in
the old world, no great speculative enterprises
afoOt and no very unusual changes of popula-
ton. The average rate of interest is prob
ably the lowest ever known, alike in the old
world and the new; the cost of the neces-
saries of life is as low as this generation has
ever known, if hot lower, and the margin Of
profits in almost every line of legitimate bust
ness is as low as at any time in this century
We are justified, therefore, in believing that
the rise of prices will come on slowly and last
for some time; that The severe experiences of
the recent past will have their restraining eff
feet, and consequently that the activity will
be confined chiefly to legitimate business for
some years till prosperity produces its usual
effect in exciting speculation and the creation
of fictitious values. After that-the crash.
The present situation is peculiar in many
respects. Perhaps the most phenomenal fact
is the low rate CT interest, that is to say, the
abundance of loanable capital, despite the
rapid increase in population and the volume
Of business. The cause is easily seen: modern
business methods dispense with the use of
money; produce pays for goods, and goods
for produce. In the crushing panic of 1887,
and the long era of depression which lasted
through Van Buren's and Tyler's administra,
lions, the western farmers grain and meat
were months in reaching the consumer on3
the manufactured articles as lorg in reach
ing the west; at each transfer of values
money was paid. Now the western factor
loads railroad train with grain and files
the certificates of that shipment in his local
bank; a telegram informs the New York
correspondent that the grain is on the way,
the credit is made and the goods may be,
often are, shipped westward thereon before
the grain gets half way to the seaboard
Five dollars may be the total cash payment
for the transfer of $4,000 worth OF
wheat and return of an equivalent in goods
Thus rapidly Increasing volume of bust
ness is transacted on decreasing transfers of
cash; banking and telcgraphy dispense with
the use of money, and there is an over
abundance Of cash for legitimate business be
sides surplus for speculation and new in
vestments.
Another very noteworthy feature is that
wages have been so well maintained In the
seven years that the cost of living has de
clined nearly one third, wages have certainly
not declined one tenth, if at all: and as the
Hon. Edward Atkinson has so ably
pointed out, the laborer has been secur-
! ing a constantly increasing share Of a
constantly increasing product The result
has been to excite immigration on a scale
never before witnessed. Not since Goth. Hun
and Fandal descended upon Rome has such a
transfer of population taken place as this
very year sees. 1t is serious question if this
! European food $4,000 laborers in 1887 at
present rates. will not force a great collapse
in the American labor market. Another very
serious thing has happened: our foreign Gus
| toners, especially England, are looking else
where for grain and cotton. Our export of
the former has fallen Off one half, and now
The latter Is threatened. We were helped out
OF the panic Of 1875 by combination Of
events which may never again occur. There
were seven good wheat crops in this country
and seven poor ones in western Europn.
The result was that in nine years We ex
ported more wheat than in the previous
ninety. The further result was the transfer
of 81 600 900, 0O0 in values to American far
mers, with which they entered the market
and created the "boom' of lS79-S0. But now
the European demand is less, and Egypt. In.
dla, Australia and tie Argentine Republic
supply far more. j. II. BEADLE.